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Inland Revenue

Tax Policy

PUBLISHED 9 June 2010

Government consults on changes to simplify the tax system

The Government is seeking feedback on proposed changes to simplify the tax system, including simplifying PAYE and income tax returns for individuals and employers, as part of Inland Revenue's move towards greater electronic interaction with the public. Consultation is taking place via an online forum [link no longer available - see archived copy] for general comment and a discussion document, Making tax easier, which gives more details of the proposed changes and invites written submissions. For more information see the Government’s media statement

Hon Bill English
Minister of Finance

Hon Peter Dunne
Minister of Revenue

Wednesday, 9 June 2010

Media Statement

Government consults on simplifying tax system

The Government is seeking public feedback on proposed changes to simplify the tax system and make it easier for people to manage their tax affairs, Finance Minister Bill English and Revenue Minister Peter Dunne said today.

The discussion document Making Tax Easier and an accompanying online forum include ways of simplifying PAYE and income tax returns for individuals and employers, Mr English says.

“Budget 2010 introduced a major rebalancing of the tax system away from consumption towards saving and investment that will better support New Zealand’s long-term economic growth.

“The Government is now looking to reform the way our tax system is administered to make it easier and more certain for taxpayers to manage their tax obligations.

The proposed changes also set out how people could self-manage most of their tax and social assistance entitlements such as Working for Families, using their own secure area on Inland Revenue’s website, Mr Dunne says.

“This would be done much like internet banking, making the whole process easier, faster and more certain for taxpayers,” he says.

“At the same time, the Government wants to ensure that the tax administration system operates efficiently and delivers value for money.

“The online consultation forum proposes several ways this might be achieved. The main idea is to shift Inland Revenue’s current emphasis away from paper-based systems towards greater use of customer-focused online technologies.

“To further simplify and reduce the number of interactions that individuals must have with Inland Revenue, a new approach is being proposed, which for some people would mean PAYE would be treated as a final tax.

“More timely and correct information would mean that tax is deducted at the right tax code each pay-day, so there would be a reduced need for an end-of-year square-up,” Mr Dunne says.

“This would give people greater confidence that the amount of tax they pay throughout the year is correct, with no unexpected tax bills arising at the end of the year.”

For businesses, including employers and the not-for-profit sector, PAYE tasks such as filing an employer monthly schedule could be managed by software that automatically communicates with Inland Revenue.

“Such a move towards electronic technologies would require all businesses to eventually move to electronic filing, Mr English says. “The Government wants to hear from employers and businesses on these proposals.”

Similarly, the Government wants to hear from the software development industry on how strategic partnerships might be developed to create the tools to help employers move to an electronic environment.

The closing date for comment on the proposals is 23 July 2010.

Have your say on the online forum at [link no longer available - see archived copy] or read the full discussion document at

Media contacts:
Mark Stewart: 021 243 6985
Grant Fleming: 021 277 9869